31 JULY 2014
2014 INTERIM RESULTS PRESENTATION
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2014 INTERIM RESULTS PRESENTATION 31 JULY 2014 1 Forward-Looking - - PowerPoint PPT Presentation
2014 INTERIM RESULTS PRESENTATION 31 JULY 2014 1 Forward-Looking Statements Disclaimer The information contained in this presentation has not been independently verified and this presentation contains various forward- looking statements that
31 JULY 2014
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The information contained in this presentation has not been independently verified and this presentation contains various forward-looking statements that reflect management‟s current views with respect to future events and financial and operational performance. The words „anticipate‟, „target‟, „expect‟, „estimate‟, „intend‟, „plan‟, „goal‟, „believe‟ and similar expressions or variations on such expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond Merlin Entertainments plc‟s (the “Group‟s”) control and which may cause actual results or performance to differ materially from those expressed or implied from such forward-looking
reflect knowledge and information available as of the date of preparation of this presentation and the Group disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward- looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. Nothing in this document should be construed as a profit forecast.
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4 Throughout the presentation, all numbers are presented on an underlying basis, excluding exceptional and non-trading items, unless otherwise stated.
1 Constant currency based on year to date 2014 average foreign exchange rates.
Visitors: 27.5m (+6.6%) Revenue: £513m (+11.2% CC1, +6.1% reported) Like for like revenue growth: +8.1% EBITDA: £120m (+14.3% CC1, +7.5% reported) Net Income: £29m (2013: loss of £11m) Dividend: 2.0p
Portfolio benefits highlighted during periods of differing divisional performance
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Like for like revenue growth: +8.1%
Midway Attractions +1.9% LEGOLAND Parks +19.0% Resort Theme Parks +7.7%
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Capex cycle
CBeebies Land – Alton Towers Legends of Chima waterpark – LEGOLAND California Penguin Ice Adventure – SLC Birmingham
Synergies
VIP Pass launch Ticketing trials
Destination positioning
LEGOLAND Deutschland new hotel and LEGOLAND Billund hotel extension Azteca hotel in Chessington
Midway roll out
5 opened year to date MT Singapore to open in Nov/Dec
LLP Developments
LEGOLAND Dubai planned for 2016 LEGOLAND Japan planned for 2017
Strategic Acquisitions
CBeebies Land at Alton Towers
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Capex cycle
CBeebies Land – Alton Towers Legends of Chima waterpark – LEGOLAND California Penguin Ice Adventure – SLC Birmingham
Synergies
VIP Pass launch Ticketing trials
Destination positioning
LEGOLAND Deutschland new hotel and LEGOLAND Billund hotel extension Azteca hotel in Chessington
Midway roll out
5 opened year to date MT Singapore to open in Nov/Dec
LLP Developments
LEGOLAND Dubai planned for 2016 LEGOLAND Japan planned for 2017
Strategic Acquisitions
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68-room King‟s Castle hotel at LEGOLAND Deutschland
Capex cycle
CBeebies Land – Alton Towers Legends of Chima waterpark – LEGOLAND California Penguin Ice Adventure – SLC Birmingham
Synergies
VIP Pass launch Ticketing trials
Destination positioning
LEGOLAND Deutschland new hotel and LEGOLAND Billund hotel extension Azteca hotel in Chessington
Midway roll out
5 opened year to date MT Singapore to open in Nov/Dec
LLP Developments
LEGOLAND Dubai planned for 2016 LEGOLAND Japan planned for 2017
Strategic Acquisitions
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Opening weekend at MT Beijing
Capex cycle
CBeebies Land – Alton Towers Legends of Chima waterpark – LEGOLAND California Penguin Ice Adventure – SLC Birmingham
Synergies
VIP Pass launch Ticketing trials
Destination positioning
LEGOLAND Deutschland new hotel and LEGOLAND Billund hotel extension Azteca hotel in Chessington
Midway roll out
5 opened year to date MT Singapore to open in Nov/Dec
LLP Developments
LEGOLAND Dubai planned for 2016 LEGOLAND Japan planned for 2017
Strategic Acquisitions
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Capex cycle
CBeebies Land – Alton Towers Legends of Chima waterpark – LEGOLAND California Penguin Ice Adventure – SLC Birmingham
Synergies
VIP Pass launch Ticketing trials
Destination positioning
LEGOLAND Deutschland new hotel and LEGOLAND Billund hotel extension Azteca hotel in Chessington
Midway roll out
5 opened year to date MT Singapore to open in Nov/Dec
LLP Developments
LEGOLAND Dubai planned for 2016 LEGOLAND Japan planned for 2017
Strategic Acquisitions
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Event Date1 2013 % revenue2 Disclosure Delivery Q1 IMS May 15th 22%
Interims July 31st 41%
Audio Webcast Q3 IMS September 18th 77%
growth Meeting Pre-close update December 2nd 94%
February 27th 100%
Meeting
Note: Subject to change
1 Based on 2014 announced schedule 2 Shows cumulative revenue up to the end of the reporting period
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£ millions, unless stated H1 2014 H1 2013 Reported Growth Constant FX Growth Like for like Growth Revenue 513 483 6.1% 11.2% 8.1% EBITDA 120 111 7.5% 14.3% Margin 23.3% 23.0% Operating Profit 71 64 10.0% 18.0% PBT 40 (11) Net Income 29 (11) Dividend 2.0p n/a
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513 483 (22) 37 6 8 1 H1 2013 Revenue FX LFL
LLP Dev. Acquisitions Central H1 2014 Revenue
Net New Business Development: £15m Like for like 8.1%1
1 Like for like growth based on those sites owned and operated before 2013. These contributed £450m of revenue in H1 2013.
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£ millions, unless stated H1 ‘14 H1 ‘13 Reported Constant Currency Revenue 233 235 (0.6)% 5.6% Like for like growth1 1.9% 9.3% EBITDA 85 86 (1.1)% 3.7% Operating Profit 61 62 (1.7)% 2.2% Existing Estate Capex 18 15 18.7%
Five new sites opened in H1 MT Singapore to open in Nov/Dec LFL Growth below long term trend:
Strong H1‟13 comparatives Political disruption in Bangkok „Polar vortex‟ on US attractions Deferred high year capex projects in two sites
FX headwind
1 2013 like for like growth is based on 2013 and 2012 figures, on a constant currency basis using 2013 exchange rates.
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Impact of LEGO movie:
Successful marketing and promotion Greatest impact in US parks Some uplift in Europe and LDCs Uplift in retail spend – implications for margins
Weather more favourable throughout Easter, particularly in LEGOLAND Windsor Strong Group promotional activity Hotel extension at LEGOLAND Billund and new hotel at LEGOLAND Deutschland have traded well Capex projects on track and budget
£ millions, unless stated H1 ‘14 H1 ‘13 Reported Constant Currency Revenue 162 139 16.5% 22.8% Like for like growth1 19.0% 1.2% EBITDA 50 38 31.7% 41.0% Operating Profit 39 27 42.4% 54.1% Existing Estate Capex 18 18 0.2%
1 2013 like for like growth is based on 2013 and 2012 figures, on a constant currency basis using 2013 exchange rates.
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Good performance from Heide Park (high year capex) CBeebies Land at Alton Towers Weather more favourable throughout Easter New Azteca hotel at Chessington expected to open in August Capex projects on track and budget
£ millions, unless stated H1 ’14 H1 ‘13 Reported Constant Currency Revenue 117 109 7.0% 8.4% Like for like growth1 7.7% 0.0% EBITDA 2
(12) (12) (0.1)% (0.6)% Existing Estate Capex 20 18 13.7%
1 2013 like for like growth is based on 2013 and 2012 figures, on a constant currency basis using 2013 exchange rates.
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£ millions, unless stated H1 ‘14 H1 ‘13 %
137 124 9.8% Central Costs (17) (13) (30.3)% EBITDA 120 111 7.5% D&A (49) (47) (4.1)% Operating profit 71 64 10.0% Net finance costs (31) (75) 59.0% PBT 40 (11)
(11)
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allocated to Op. Groups - split approximately 50:50 between Op. Groups and Central Central costs of between £30-35m in FY2014 D&A to remain at 8-9% of revenue 2014 senior facility costs of 4.4%
£7m of finance lease interest £6m non-cash amortisation of financing costs
Strong trading in US: Effective Tax Rate of 28% in 2014, and Cash Tax Rate of 24% FX: FY2013 EBITDA £21m lower if based upon latest rates P&L Guidance
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£ millions, unless stated H1 ‘14 H1 ‘13 Existing Estate 61 52 New Business 40 33 Accommodation 17 9 Midway 23 24 LLP Development Total Capex 101 85 Acquisitions 1 Total Capex and Acquisitions 101 86
Year-on-year increase in EE capex driven by phasing H1 guidance in line with expectations FY2014 guidance raised to £195-200m
Reflects LEGOLAND Japan capex of £5-10m
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6 120 38 (20) (101) (30) (1) H1 2014 EBITDA Working capital Cash tax Capex Net financing costs Other Net cash flow
Movement in Net Debt December 2013 (1,006) Net cash flow 6 FX 25 Other (2) June 2014 (977)
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Summer 2017 opening Located in centre of country, between Tokyo and Osaka. Catchment area of 20m+ people Good infrastructure and transport links. No local competition Strongest theme park market in Asia Developed theme park market High density of population Highly affluent market Good LEGO brand awareness - huge upside in worlds 2nd largest toy market Strong support from KIRKBI (property investment) and City of Nagoya (infrastructure) Merlin to invest £53m with target cash ROIC of at least 20% EBITDA margins of 15-20%
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Smaller footprint than other parks, but significant scope for expansion long term „Best practice‟ from existing six LEGOLAND parks Concept has been evolved and upgraded for the Japanese market
Parking Initial park Expansion
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Florida opened on time and on budget in October 2011 Performance has been ahead of expectations On track for at least 20% ROIC Malaysia opened in September 2012 Management contract c£2-3m EBITDA, no capex
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Successful track record of openings
Potential for up to 20 LEGOLAND parks across the world. Targeting at least one opening every 3 years.
2016 2017 Existing LEGOLAND Parks Announced openings Opportunities
Dubai expected to open in 2016 LEGOLAND Japan expected to open in summer of 2017
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450 513 483 (22) 11 10 28 (1) 10 15 1 H1 2013 Revenue FX 2012 closing estate in 2013 Visitors RPC Other
roll out LLP Dev. Acq's Central H1 2014 Revenue
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Like for like 8.1% Gross New Business Development: £26m
1 Like for like growth of 8.1% (£37m) is based upon the 2012 closing estate revenue contribution in 2013, translated at constant currency 2014 rates. In H1 2013,
£11m of revenue was generated from those sites opened after the end of 2012, and these are therefore excluded from the like for like calculation. 1 Denominator for 2014 like for like calculation Contribution in H1 2013 from those sites
2012 and therefore excluded from the like for like calculation
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June 2014 June 2013 Banks loans and borrowings 1,161 1,370 Cash and cash equivalents (268) (147) Net bank debt 893 1,223 Finance lease
84 86 Net debt 977 1,309
S&P: BB Moody‟s: Ba3
Credit Ratings – Corporate Family Rating
H1’ 13 average FX rates H1’ 14 average FX rates % change Revenue impact EUR 1.18 1.21 (3.3)% (3) USD 1.54 1.66 (8.2)% (9) AUD 1.52 1.84 (21.3)% (6) Other (4) Total (22)
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H1’ 13 average FX rates H1’ 14 average FX rates % change EBITDA impact EUR 1.17 1.23 (4.6)% (1) USD 1.53 1.67 (8.7)% (3) AUD 1.53 1.84 (20.2)% (1) Other (2) Total (7)
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Midway Attractions LEGOLAND Parks Resort Theme Parks Group 2014 2013 % 2014 2013 % 2014 2013 % 2014 2013 % Statutory visitors (m)
17.4 17.0 2.8% 4.6 3.9 16.6% 4.4 4.0 8.8% 26.4 24.9 5.9%
Revenue per cap (£)
12.82 13.14 (2.4)% 29.44 29.65 (0.7)% 21.22 21.43 (1.0)% 17.09 17.07 0.1%
Visitor revenue (£m)
224 223 0.3% 134 116 15.8% 93 86 7.7% 451 425 6.0%
Other revenue (£m)
9 12 (18.4)% 28 23 19.9% 24 23 4.7% 62 58 6.9%
Total revenue (£m)
233 235 (0.6)% 162 139 16.5% 117 109 7.0% 513 483 6.1%
LFL revenue growth
1.9% 9.3%
1.2%
0.0%
4.3%
85 86 (1.1)% 50 38 31.7% 2
111 7.5%
61 62 (1.7)% 39 27 42.4% (12) (12) (0.1)% 71 64 10.0%
18 15 18.7% 18 18 0.2% 20 18 13.7% 61 52 18.6%
All figures are based on interim results. EE = Existing Estate Statutory Visitors exclude LEGOLAND Malaysia and joint ventures
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UK
Americas Asia Pacific Group
3 May 2014 Mov’t 28 June 2014 3 May 2014 Mov’t 28 June 2014 3 May 2014 Mov’t 28 June 2014 3 May 2014 Mov’t 28 June 2014 3 May 2014 Mov’t 28 June 2014 SEA LIFE 13
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Madame Tussauds 2
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4 1 5 6 1 7 15 2 17 Dungeons 5
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1 9 LDC 1
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6 1 7 1
10 1 11 Eye 2
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Other
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Midway 23
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16 3 19 22 1 23 87 4 91 LLP 1
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RTP 4
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Group 28
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18 3 21 23 1 24 100 4 104
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